Flexible-hour Contracts Explained


Flexible-hour Contracts Explained

From 1 April 2017, all individual employment agreements needed to comply with changes to the Employment Relations Act 2000, created by the Employment Relations Amendment Act 2016. All collective employment agreements must comply too; however they need to comply on different timeframes depending on when the CEA expires.


In short, there are minimum legislative standards relating to shift cancellations, secondary employment and flexible-hour contracts – commonly known as “availability provisions”.

Availability Provisions


Waged Employees

Many employment agreements contain a clause outlining a waged employee’s guaranteed hours of work with a statement saying “the Employee may be required to work additional hours as required”.

Under the legislative amendments, if an Employer “requires” an Employee to be available to work outside the guaranteed hours, then the employment agreement must contain an availability provision.

This provision must be used when an Employee’s work is conditional on the Employer making work available and where the Employee is required to be available to accept the work. The clause can only be included when there are specific agreed hours of work and there are a guaranteed minimum number of hours.

Employers also have a responsibility to provide reasonable compensation for requiring Employees to be available to work outside the guaranteed hours.


Salaried Employees

Most employment agreements for salaried Employees state that the Employee may be required to work outside their ordinary hours to fulfil the requirements of the role and the salary compensates for this. Whether this will suffice under the legislation will largely depend on the hours of work and the specific wording.


Cancellation Provisions

Where an availability provision is stated in the IEA a cancellation provision will also need to be stated clearly advising what payments will be provided to employees in the event that a previously agreed shift is cancelled at short notice.


Employment Agreement Clauses

Not getting this right means that an Employee is within their rights to decline additional work offered and can’t be disciplined or disadvantaged for saying no to extra work hours.


The Labour Inspectorate can take action against an Employer because there is no availability provision and seek a penalty for non-compliance.

Depending on the requirements within each different business, there are a range of options for wording in relation to hours of work, additional hours of work and availability. Get in touch for advice or to access our template employment agreement clauses to ensure your documentation complies.

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